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NQ Minerals PLC (NQMI)

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Thursday 31 May, 2018

NQ Minerals PLC

Final Results

RNS Number : 8904P
NQ Minerals PLC
31 May 2018
 

31 May 2018

NQ Minerals plc

(The "Company" or "NQ Minerals")

Final results for the period ended 31 December 2017

NQ Minerals (NEX: NQMI) (OTCQB: NQMLF), an Australia-based exploration and mining company, today announces its final results for the period ended 31 December 2017.

Chairman's statement

 

On 18 May 2017, the Company acquired all of the issued and outstanding shares in Keen Pacific Limited, along with its wholly-owned subsidiaries Ivy Resources Pty Ltd and Hellyer Gold Mines Pty Ltd. The acquisition resulted in the Group acquiring the entire Hellyer tailings project in Tasmania, Australia which is in line with the Company's strategy of becoming a near-term revenue generating base metal production company. Work commenced during the period on preliminary planning and preparation work with regards to the refurbishment of the existing operating facilities on site in order to extract and treat the large high-grade tailings deposit and produce three marketable concentrates of lead, zinc, gold/silver/pyrite. Refurbishment work subsequently commenced in early 2018 and is now well underway. The Company has promoted a strong environmental culture over the last year and we are proud of our environmental record to date with an excellent safety performance at Hellyer and our North Queensland tenements.  NQ has built strong relationships with the Tasmanian regulatory authorities and has recruited a strong and robust management team for its Hellyer project. The team we now have on board has an exceptionally strong set of skills for commissioning, running and managing businesses like the Hellyer project with its operating team consisting of more than 50% of personnel that have worked previously at Hellyer. The skills and wisdom that come with this accumulated experience is priceless.

 

Projects

 

NQ is focused on three main projects being Hellyer in Tasmania which offers the prospects of significant short term cashflow, and its two exploration projects, Ukalunda and Square Post, in North Queensland, Australia. These two exploration projects are both located in prospective mining districts that form part of the well-known Charters Towers Gold Province, where more than 20 million ounces of gold has been mined. 

 

Hellyer

 

The Board and management of NQ Minerals consider that the Hellyer Gold Mine in Tasmania represents a significant permitted project for the Company with life of mine revenues exceeding AU$1.3bn (US$1.033bn) and a post-tax NPV estimated by management of AU$276m (US$210m). The capital expenditure to start the project is low at only AU$20m and the project is expected to have a 10 year mine life. The necessary plant and equipment exists on site including a large pre-existing mill facility and full supporting infrastructure, including a direct rail line to port with port concentrate housing, handling and loading facilities.

 

NQ Minerals' acquisition of Hellyer allows the opportunity to fully process and bring the tailings to account. Held within four separate areas, the tailings total 11.24 mt, and comprise a JORC compliant resource estimated at 9.5 mt which is host to gold at 2.61 g/t Au for 796,000 oz Au, silver at 104 g/t Ag for 32 m oz Ag, lead at 3.03% Pb for 287,800 tonnes and zinc at 2.5% Zn for 237,900 tonnes.

 

Ukalunda

 

The Group continues to invest in the Ukalunda. The tenement, which lies midway between the Lake Dalrymple/Burdekin Dam and the historic Wirralie gold mine, which previously produced 1.1 million ounces of gold. The Ukalunda project area contains multiple shows of mineralisation that are the same as other mineralisation shows discovered in mining districts around the world that host major ore bodies. This suggests that a major ore body may be present in this district. Historic, wide-ranging exploration has been carried out at the Ukalunda permit area, which had discovered some areas of rich mineralisation of gold, silver and a number of associated base metals. The Permitting for processing the Silver and lead stockpiles at the Sunbeam Mining Lease is now underway, with a view of obtaining approval in 2019.

 

Square Post

 

Investment continues in the Square Post tenement which lies close to the Flinders Highway, 10 kilometres north east of Mingela and 50 kilometres south of Townsville. The area is considered to be underexplored, principally due to its rugged terrain. The permit consists of 47 sub-blocks covering an area of around 168km2. Map to Mine has reported that the Square Post tenement is in good standing.   The Company has achieved excellent rock chip results from the Square Post tenement with our Geologists now planning a drill program for next season.

 

Environmental

 

The Company is determined to make a significant and positive difference in the communities we operate.  The Company operates at the highest standards as it relates to its Environmental, Community, Sustainability and Human Resource policies and procedures.

 

This has translated well on our permitting initiatives. In May/18, the Company announced that, further to the receipt of a required Queensland Environmental Authority, the Company has been granted a Mining Lease for its wholly-owned Sunbeam Silver Mine ("Sunbeam"). Sunbeam is the most advanced of 33 prospects on the Company's Ukalunda project ("Ukalunda") located in the Charters Towers Mining District of Northern Queensland, Australia.  In November 2017, the Company also announced that it had received approval of its 2017 Environmental Management Plan for the commencement of operations at its wholly owned Hellyer Gold Project in Tasmania, Australia. The Permit (PCE No 7386, DA 138/2006) granted by the Environmental Protection Authority of Tasmania, allows NQ Minerals to commence tailings reprocessing operations at its flagship project Hellyer Gold mine. The success of our permitting is a critical factor, and we believe Management and the Board have met expectations.

 

Outlook

 

The Hellyer tailings project is a flagship project for NQ Minerals and is expected to see us transform into a near-term producer during 2018. The refurbishment process is now well past the half way mark, and all critical components, manufactured equipment and replacement parts have been ordered along with the required labour to move the project into production. The Board believes Hellyer is a world-class project that blends in well with our North Queensland assets and our long-term goal to become a significant gold and base metal producer in Australia.

 

The Executive team and senior management have performed exceptionally well, and the project is now fully permitted to commence operations from October 2018.  I am optimistic about the Group's growth potential and we look to the future with significant confidence.

 

On behalf of the board

 

Brian Stockbridge

Chairman

31 May 2018

 

 

 

 

About NQ Minerals

 

 

NQ Minerals is an Australia-based exploration and mining company, focusing on projects where past exploration work has established the presence of mineral occurrences. The Company's management team has decades of experience in the exploration and production of gold, silver and a variety of base metals. Please visit our website at www.nqminerals.com.

 

 

For further information, please contact:

 

 

NQ Minerals Plc

 

 

Brian Stockbridge, Non - Executive Chairman

 

+ 44 (0) 7876 888011

Kris Kottmeier, VP Corporate Development

+ 44 (0) 20 3637 6522 (UK)

 

 

+ 1 (604) 506 6502 (North America)

 

Daniel Stewart & Company Plc

 

 

Richard Potts

 

+ 44 (0) 20 7776 6596

 

Nikhil Varghese

+ 44 (0) 20 7776 6571

 

 

IFC Advisory Ltd

 

 

Graham Herring

 

+44 (0) 20 3934 6630

 

Tim Metcalfe

 

+44 (0) 20 3934 6630

Miles Nolan

 

+44 (0) 20 3934 6630

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

 

 

 

 

 

Year Ended

 

Year Ended

 

 

 

 

 

 

31 December

 

31 December

 

 

 

 

 

 

 

2017

 

 

2016

 

 

 

 

 

 

£'000s

 

£'000s

 

 

 

 

 

 

 

 

 

 

 

Administrative expenses

 

 

                   (13,453)

 

                              (2,394)

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

                   (13,453)

 

                              (2,394)

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

    (3,869)

 

 

                      -  

Finance income

 

 

                        136

 

                                        3

Loss on ordinary activities before taxation

 

 

                   (17,186)

 

                              (2,391)

 

 

 

 

 

 

 

 

 

 

 

Taxation

 

 

                          93

 

                                        -

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

 

 

                   (17,093)

 

                              (2,391)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

Foreign exchange (losses)/gains

 

 

                       (103)

 

4

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss for the year attributable to the owners of the Parent

 

   (17,196)

 

 

    (2,387)

 

 

 

 

 

 

 

 

 

 

 

Loss per share (pence)

 

 

 

 

 (7.34p)

 

 (1.62p)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

AS AT 31 DECEMEBER 2017

 

 

 

 

 

 

 

 

As At

 

As At

 

 

 

 

 

31 December 2017

 

31

December 2016

Assets

 

£'000s

 

£'000s

Non-current assets

 

 

 

 

 

 

Intangibles

                        988

 

                        899

Inventory

                    22,359

 

                            -

Property, plant and equipment

                     8,204

 

                            -

Financial assets

                     1,112

 

                            -

Deferred tax assets

                     1,032

 

                            -

Other assets

                     1,072

 

                            -

Deposits

                            -

 

                        239

Total non-current assets

                    34,767

 

                     1,138

 

 

 

 

 

 

Current assets

 

 

 

 

 

Trade and other receivables

                        755

 

                        373

Cash and cash equivalents

                     3,310

 

                     2,084

Total current assets

                     4,065

 

                     2,457

Total assets

                    38,832

 

                     3,595

 

 

 

 

Equity and liabilities

 

 

 

 

 

Equity attributable to owners of the Parent

 

 

 

 

 

Ordinary shares

                        283

 

                        159

Share premium

                    11,565

 

                     2,290

Unissued capital reserve

                     5,512

 

                            -

Share option reserve

                     5,391

 

                        231

Other reserve

                        201

 

                          92

Group reorganisation reserve

                    (6,983)

 

                    (6,983)

Translation reserve

                         (12)

 

                          91

Merger relief reserve

                     7,171

 

                     7,171

Accumulated losses

                   (20,133)

 

                    (3,040)

Total equity

                     2,995

 

                          11

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Financial liabilities

                    17,289

 

                            -

Provision for rehabilitation

                     4,298

 

                            -

Deferred tax liabilities

                     7,402

 

                            -

Total non-current liabilities

                    28,989

 

                            -

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

                     3,299

 

                        558

Financial liabilities

                     2,330

 

                     1,926

Convertible notes

                     1,219

 

                     1,100

Total current liabilities

                     6,848

 

                     3,584

Total liabilities

                    35,837

 

                     3,584

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

                    38,832

 

                     3,595

                     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

 

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

 

 

 

 

 

Year Ended

 

Year Ended

 

 

 

 

 

 

31 December

 

31 December

 

 

 

 

 

 

 

2017

 

 

2016

 

 

 

 

 

 

£'000s

 

£'000s

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

                    (5,781)

 

                    (1,185)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Payment for exploration expenditure

 

                         (89)

 

                       (562)

Payment for share purchase acquisition, net of cash acquired

 

                   (11,039)

 

                       (239)

Net cash flows from investing activities

 

                   (11,128)

 

                       (801)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Increase in borrowings:

 

 

 

 

New borrowings

 

 

    24,267

 

 

     3,063

Transaction costs

 

 

    (2,366)

 

 

       (649)

Interest paid

 

 

    (2,407)

 

 

         (50)

Proceeds on issue of shares:

 

 

 

 

New Shares

 

 

     2,655

 

 

     1,148

Transaction costs

 

 

       (146)

 

 

         (59)

Net cash flows from financing activities

 

                    22,004

 

                     3,453

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

                     1,226

 

                     1,467

Cash and cash equivalents brought forward

 

                     2,084

 

                        617

Cash and cash equivalents carried forward

 

                     3,310

 

                     2,084

 

 

 

 

  

 

 

 

 

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2017

 

 

1.

 

The financial information set out above does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006. The financial information has been extracted from the statutory accounts of NQ Minerals Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 31 May 2018.

 
 
 
 
 
 

The preliminary announcement of the results for the period ended 31 December 2017 was approved by the board of directors on 31 May 2018.

 

 

 

2.  Loss Per Share

 

Loss per share

 

 

 

 

Year Ended

 

 

Year Ended

 

 

 

 

 

 

31 December

 

31 December

 

 

 

 

 

 

 

2017

 

 

2016

 

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss after tax attributable to equity holders of the Company

                     17,093,000

 

                        2,391,000

 

Weighted average number of ordinary shares

                   232,873,534

 

                    147,576,361

 

 

Basic and diluted loss per share

 (7.34p)

 

 (1.62p)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

 

 

 

 

 

 

 

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Since the Group does not have any dilutive potential ordinary shares at balance sheet date, the diluted loss per share is the same as the basic loss per share.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

Potentially convertible shares

 

 

 

 

 

 

 

 

 

The Company has convertible ordinary shares in issue as at 31 December 2017 as follows:

 

 

 

 

-

65,021,012 contingent shares in the Company in connection with the purchase of Keen Pacific Limited which are only issuable on the exercise of underlying dilutive outstanding financing options and convertible notes which have conversion periods ranging from September 2018 to June 2022;

 

 

 

 

 

-

23,831,827 (2016: 20,508,728) convertible ordinary shares in connection with the convertible notes in issue at year end. These convertible notes have a maturity date within the next 12 months; and

 

 

 

-

169,926,920 (2016: 8,000,000) options in issue to various directors and financiers as disclosed in Note 29. These are options expire in the 2021 and 2022 financial year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above have not been factored into the loss per share calculation as they do not dilute current earnings per share. 

 
                         

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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